If you want to open the door to your first home, the FHA loan could be the key. Backed by the federal government, it's the forgiving, low-down-payment program that has helped millions of Americans become homeowners.
What Is an FHA Loan?
An FHA home loan is a mortgage insured by the Federal Housing Administration (FHA), part of HUD. Because the government backs the loan, lenders can offer lower down payments and more flexible credit guidelines than conventional loans — which is why it's a go-to for first-time buyers and borrowers rebuilding credit.
FHA Loan Benefits
✓Down payments as low as 3.5%
✓Sellers may contribute up to 6% of the sale price
✓Flexible debt-to-income ratios
✓Non-occupant co-applicants allowed — a parent or relative
✓Fixed or adjustable rates
✓Assumable — a qualified buyer can take over your loan
Who It's For
✓First-time homebuyers with limited savings
✓Borrowers with credit in the 580–660 range
✓Buyers recovering from past credit incidents
✓Families buying a 1–4 unit property
✓Renovators using the 203(k) program
FHA Loan Types
Purchase
Insured by the FHA, with low down payments and easy credit qualifying.
Streamline Refinance
Lock a lower rate with minimal documentation and no appraisal.
Cash-Out Refinance
Convert home equity into cash for debt, renovations, or large expenses.
203(k) Renovation
Finance repairs and improvements into one loan — Standard or Limited.
Requirements at a Glance
- 3.5% down with a 580+ credit score
- Primary residence occupancy required
- FHA mortgage insurance premium (MIP) applies
- Flexible debt-to-income ratios
- Income, asset, and employment documentation
- Available for 1–4 unit homes, condos, and manufactured homes
Pros & Cons
Pros
- Down payments as low as 3.5%
- Flexible credit guidelines
- Seller can pay up to 6% of closing costs
- Assumable by a future qualified buyer
Cons
- Upfront and annual mortgage insurance premiums
- Primary residence only
- FHA loan limits apply
Jimmy's tip: FHA + down payment assistance is one of the most powerful combos in Central Florida — many buyers walk in with almost nothing out of pocket. Ask me what you qualify for.
FHA Loan FAQs
Straight answers to the questions borrowers ask most. Your loan officer is always your best resource for your specific situation.
What is an FHA loan?
An FHA loan is a government-backed mortgage insured by the Federal Housing Administration, part of the U.S. Department of Housing and Urban Development (HUD). The government insurance lets lenders offer lower down payments and more flexible credit guidelines.
How much down payment do I need?
As low as 3.5% for borrowers with a credit score of 580 or higher. Borrowers with lower scores may still qualify with a larger down payment.
Do I have to be a first-time homebuyer?
No. FHA loans are popular with first-time buyers, but repeat buyers can use them too — as long as the home is your primary residence.
Can sellers help with closing costs?
Yes — sellers may contribute up to 6% of the sale price toward your closing costs, and a parent or relative can be a non-occupant co-applicant.
What is an FHA 203(k) loan?
A 203(k) loan finances both the purchase (or refinance) and the renovation of a home in a single mortgage. The Standard 203(k) covers major repairs and construction; the Limited 203(k) covers smaller, non-structural improvements.
Can I refinance with an FHA loan?
Yes. An FHA Streamline Refinance can lower your rate with minimal documentation and no appraisal, and an FHA Cash-Out Refinance converts home equity into cash.
CrossCountry Mortgage, LLC · NMLS #1444822 · Equal Housing Lender
This page is for informational purposes and is not a commitment to lend. Program availability, guidelines, rates, and terms vary and are subject to change. Your rate may vary. Terms apply.